ETF Education Report: AXS 1.25X NVDA BULL DAILY ETF (NVDB)

What this ETF is trying to do

The NVDB ETF is a specialized type of investment. It is a "single-stock ETF," which means it focuses on one specific company. It is also "leveraged," meaning it uses financial tools to try to multiply the daily performance of NVIDIA (NVDA). This ETF is designed to provide 1.25x the daily movement of that stock.

What the numbers show

The current price of NVDB is $37.22. To understand how the price has changed, we can look at two different types of returns:

• Price Return: This measures only the change in the share price. The year-to-date (YTD) price return is approximately 32.22%. Over the last year, the price return was approximately 24.71%.

• Total Return: This includes both the price changes and any cash distributions paid out. The YTD total return is approximately 34.74%, and the one-year total return was approximately 27.77%.

Because the total return is higher than the price return, it shows that distributions added value to the overall return. For a visual example, an estimated price from roughly one year ago was $29.85. If you had invested in the share price alone, it would have grown from that estimated amount to the current $37.22.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. NVDB has a distribution yield of approximately 1.89%. This means the cash paid out is about 1.89% of the ETF's price. Over the last 12 months, there were 4 distributions, which usually happen every quarter. While these payments provide cash, they are not the same as total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly over time. StockValueFinder uses an "erosion-risk score" to help monitor this. For NVDB, the erosion score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF provides a way to seek higher daily returns based on the movement of a single stock.

• The data shows positive price returns and total returns for both the year-to-date period and the past year.

Cons

• Because it is a leveraged single-stock ETF, it focuses heavily on the performance of just one company.

• The distribution yield is relatively low compared to some other types of income-focused funds.

Beginner takeaway

NVDB is a leveraged tool designed to track the daily movement of NVIDIA. When looking at this ETF, it is important to distinguish between the price return (how much the share price moved) and the total return (the price movement plus cash distributions). Always remember that high-leverage investments behave differently than standard ETFs.